HOLDING COMPANIES
Saudi business is set to see positive changes and creative innovation in the coming year of reforms.
This company was established in 1976 by my late grandfather, but first started as a stevedoring company for port operations before moving into the shipping industry and eventually to logistics on land transportation. We do work in shipping and transportation; we represent shipping lines and are shareholders as well. We handle port operations, heavy machinery for the port, and a specialized company to realize this work. We work in construction and cleaning and maintenance projects as well as inland transportation. We own more than 3,000 trucks, all of which are our own assets. We also have diversified our portfolio with real estate development on our own land to fulfill the vision of housing in Saudi Arabia. We also do work with the Ministry of Housing, which is developing projects for apartments and others. Moreover, we operate in the retail sector, where we represent international fashion companies. In Saudi Arabia, we have about 25 outlets selling international brands. We have been strengthening our core business, logistics, for 45 years, and will continue to invest.
We are expanding and increasing our space by 10 to 15% per year, which is healthy, opening five stores a year. We opened five new stores in 2016 and expect to open a dozen by 2018, some in the country and some throughout the Gulf. We plan to increase both market share and size. We have seen a 3% decrease YoY in our old stores, but across our total operation foot traffic has increased from 29 million to 35 million visitors, mostly due to the introduction of new stores, which is a strong reason to keep opening new stores. Our return on equity has been high, at over 50%. In 2016, we opened one new store in Kuwait and the rest were in Saudi Arabia. The signs thus far lead us to believe we will have reasonable growth and increase our market share. Overall the market is getting smaller, but in 2016 Jarir took more market share, and we expect to repeat that in 2017. We should see faster growth in 2019-2020, not because of budget but because of the new base. GCC countries will form a more and more important part of that growth relative to Saudi Arabia, along with some of our other initiatives like e-commerce.
Zahid Group is a privately held organization, led by an established family whose commercial roots date back over a century. Initially, the group focused on passenger vehicles, followed by construction machinery, which represents a major business for us. Throughout the years, we continued to grow and today we are active in over 10 thriving industries. We are a Saudi organization and, to a large extent, our focus is on our investments in our country. We do have a few investments abroad. Now is the time to restructure and refocus on our core competencies and strengthen ourselves in those areas. We are proud of what Zahid Group has achieved in the past, but there is a great deal that we can still do. We want to work on developing the skills of our employees and increase the recruitment of competent nationals even further. The number of our Saudi employees continues to rise, and we are proud they represent more than one-third of our workforce across the group's companies.
The group has developed strong foundations over the past seven decades in many sectors of our economy, allowing us to position ourselves at the forefront of several of them, particularly the leasing and automotive sectors where we have played pioneering roles. I do not view Alissa Group as a family business, but rather a business that has a fiduciary duty to protect and maximize the interests of its shareholders, no matter their constitution. However, as in many Saudi companies, our corporate culture is a subset of our nation's culture, which for many decades has been based on a sense of entitlement, rather than on performance or merit. During times of reform and transformation, leaders must communicate an inspiring unifying vision which is authentic and compelling enough to win the hearts and minds of their most valuable enabling assets: their people.
Roots Group comprises about 30 subsidiaries worldwide organized under three pillars of business: commercial, industrial, and design and building solutions. The commercial division was the starting point for Roots more than 35 years ago. Today we represent some of the most recognized construction equipment and building material brands such as Bosch, Haulotte Jungheinrich, and Case Construction. We have built a strong name over many years of supplying large infrastructure projects with everything from cranes to concrete mix. In 2013, Roots sealed a joint venture deal with Ideal Standard, and in less than five years we increased sales from IDS to account for 13% of the overall commercial division revenues. In addition to working on a varied but complementary lines of products, our geographical spread has also been an important factor in our success. We are present in Egypt, Syria, Lebanon, UAE, Jordan, and Nigeria across 11 markets. Our growth strategy is to expand according to forecasted needs and requirements and organically curtail economic cycles.
A'amal Group started as an investment advisory house, mainly for privatization projects. We did several projects in Saudi Arabia and overseas. For our first project, we were appointed by the Malaysian government to advise it on the first privatized power plant in Saudi Arabia. We were successful, and the project was awarded to a consortium comprised of the Malaysian government and Saudi investors. We continued for a couple of years as an investment advisory firm, mainly in the energy sector. After three years, we decided that we really needed to be involved in the energy sector ourselves. Now in 2017, we have around eight joint ventures in the energy, power, and security sectors. We are not only in Saudi Arabia. We have a global base in Southeast Asia and have acquired some additional assets in Eastern Europe. What we do is buy a company, restructure it, and take it internationally as an IPO or exit, like an in-house private equity program.
The changes we have been seeing in Saudi have started affecting our business as well. There is real and sincere interest in what is going on here. American and Italian shipbuilders are coming here for talks on military shipbuilding, because now any military procurement has to be at least 50% produced in Saudi Arabia. This is all a part of Vision 2030. We will certainly be involved and provide services in shipbuilding. And our steel industry will also benefit from these increased industrial partnerships and initiatives. In five years, this will be a completely different country and society. There will be more Saudis on the payroll. Today 85% of the people in our high-tech positions are already Saudi in our company. No other company has these kinds of Saudization figures. We need to involve people in their own economy and not rely on foreigners. Here, reform is being driven by our leaders. That is what is lacking in many other countries.
HOLDING COMPANIES
TABLE OF CONTENTS
Column
YB Pehin Dato Lim Jock Seng, Minister at the Prime Minister’s Office & Second Minister of Foreign Affairs and Trade, Brunei
TBY talks to YB Pehin Dato Lim Jock Seng, Minister at the Prime Minister's Office & Second Minister of Foreign Affairs and Trade, Brunei, on the sector.
read articleReview
A Crude Awakening
The Kingdom has made renewables a critical aspect of its ambitious Vision 2030 effort to diversify its economy and wean itself from a strictly carbon-based diet, not to mention empower local businesses and individuals to take up the mantle and lead the energy sector into the next generation.
read articleInterview
Abdulaziz AbdulKarim, Vice President of Procurement & Supply Chain Management (PSCM) , Saudi Aramco,
TBY talks to Abdulaziz AbdulKarim, Vice President of Procurement & Supply Chain Management (PSCM) at Saudi Aramco, on the IKTVA program, supporting local content, and looking back over a successful year.
read articleInterview
Ayman Abdullah Alfallaj, CEO, Thiqah
TBY talks to Ayman Abdullah Alfallaj, CEO of Thiqah, on how the private sector can keep pace with the speed of public reforms, delivering a strong and lasting value proposition, and integrating the fruits of privatization into the public sector.
read articleFocus: Technology Investments
Investment Calling
A technological revolution is underway in the Kingdom. Already one of the most tech-savvy nations in the Middle East, the Saudi market has long sought a thriving domestic technology and innovation scene. And with Vision 2030, it is on course to deliver just that.
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A Hejaz Unhindered
An ambitious series of road and rail projects from the Jordanian border down to the Indian Ocean are slated to open in part before the end of 2017. They bring the Kingdom that much nearer to its goal of greater non-carbon-based economic integration with the world.
read articleInterview
Sulaiman bin Abdullah Al-Hamdan, Former Minister of Transport and Minister, Civil Service
TBY talks to Sulaiman bin Abdullah Al-Hamdan, Former Minister of Transport and current Minister of Civil Service, on an attractive legislative framework for investment, railway linkages, and port developments.
read articleInterview
Rumaih M. Al-Rumaih, President, Public Transport Authority (PTA
TBY talks to Rumaih M. Al-Rumaih, President of Public Transport Authority (PTA) & Acting President of Saudi Railway Organization, on teaming up with commercially committed partners, making sure the Kingdom's land and sea bridges are of the first order, and providing employment for all the Kingdom's inhabitants.
read articleInterview
Nabeel M. Al-Amudi, President, Saudi Ports Authority, and Minister of Transport
TBY talks to Nabeel M. Al-Amudi, Minister of Transport, and President of Saudi Ports Authority, on optimally restricting concession agreements, resolving bottlenecks in the logistics chain, and privatizing as rapidly as possible.
read articleInterview
Khaled Bin Abdullah Al Hogail, CEO & Managing Director , Saudi Public Transport Company (SAPTCO)
TBY talks to Khaled Bin Abdullah Al Hogail, CEO & Managing Director of the Saudi Public Transport Company (SAPTCO), on the importance of strong and rational regulations, knowledge transfers, and unifying public and private transportation networks.
read articleInterview
Imad El-Zein, CEO, Auto World-Sixt Saudi Arabia
TBY talks to Imad El-Zein, CEO of Auto World-Sixt Saudi Arabia, on growing market share in challenging circumstances, partnering with world-class players to boost its local presence, and combining better services with lower costs.
read articleInterview
Saleh H. Al-Ghamdi, Acting CEO, Saudi Air Navigation Services Company (SANS)
TBY talks to Saleh H. Al-Ghamdi, Acting CEO of Saudi Air Navigation Services Company (SANS), on maximizing safe and effective services, effectively increasing the rate of Saudization, and easing the pathway of women into the workforce.
read articleInterview
Khalil Kutubkhanah, CEO, Jeddah Development and Urban Regeneration Company (JDURC)
TBY talks to Ibrahim Khalil Kutubkhanah, CEO of Jeddah Development and Urban Regeneration Company (JDURC), on Jeddah's unplanned settlements, the company's redevelopment projects, and its partnership model with the private sector.
read articleInterview
Dr. Khalid Bin Mohammed Al Shaibani, Deputy Minister, Planning and Health & Director of the Vision Realization Office
TBY talks to Dr. Khalid Bin Mohammed Al Shaibani, Deputy Minister for Planning and Health & Director of the Vision Realization Office, on reforms within the Ministry of Health, the corporatization of healthcare provision, and transformations in care delivery.
read articleInterview
Mohanad A. Dahlan, CEO, University of Business and Technology (UBT) Company
TBY talks to Mohanad A. Dahlan, CEO of University of Business and Technology (UBT) Company, on the evolution of the company, education investments, and upcoming sectors that will need support from the sector.
read articleFocus: Universities
Broad and Deep
As part of the continuing decentralization of higher education in Saudi Arabia, individual universities are pursuing their own paths to grow their faculties, engage with various international stakeholders, and ultimately move toward a more privatized future.
read articleInterview
Rafique Izhiman, Area General Manager KSA Jeddah, Yanbu Hotels
TBY talks to Rafique Izhiman, Area General Manager KSA Jeddah/Yanbu Hotels & General Manager, Intercontinental Hotel Group (IHG), Jeddah, on the role the firm plays in the market, expanding its footprint in the country, and expectations for 2017.
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